I gave the Irregulars a quick preview of this one over the weekend, and a lot of folks have been asking about it, so I thought I ought to take a more detailed look.
This is from an ad for the Energy Strategist newsletter, now run by Robert Rapier for Investing Daily, and, as always, it’s an enticing tale about a “secret” company that has a huge and valuable asset that no one knows about. Here’s how he gets us interested:
“It’s the largest independent oil and gas explorer in the United States… but I bet you’ve never heard of it.
“Like many firms that never deal directly with the public, this one flies under the radar. It has been quietly successful for decades as it goes about its profitable business ….
“We’re in East Africa, specifically Mozambique, the world’s most promising new area for deepwater exploration.
“This region of astonishingly rich gas discoveries is in the offshore Rovuma Basin, and it goes by the humble name of “Area 1.” But there’s nothing humble about its estimated gas reserves of 100 trillion cubic feet.
“Let’s put that into perspective. The United States produced just 18 trillion cubic feet of natural gas last year.
“The proven reserves of New York’s much-hyped Marcellus Formation total 13 trillion cubic feet….
“Bottom line, this gas find off Mozambique is the largest discovery of the decade. And yet most investors have no clue.”
So … that’s already enough clues for the sleuths among you to sniff out a preemptive answer (and I’m sure several of you have already done so), but let’s check out a few more details just to make sure:
“… it’s not hard-to-get-at shale gas either. This gas is located about 5,000 feet below the surface. That’s a perfect match for the skills this company has developed from 37 years of operating in the Gulf of Mexico.
“Even better, half of this gas is in one enormous, interconnected field. That makes it much easier to recover the gas, since drilling is more efficient.
“… this is an American company that has been trading on the NYSE for 27 years….
“More reasons to like this company
“If all this stock had going for it was its huge Mozambique gas find, it would be worth buying. But there’s more:
“While based in Texas, it operates in Canada, Algeria, the Red Sea and Peru. So the execs are no strangers to dealing with foreign governments.
“This company has been around since 1959. That staying power means a lot to me. And it has grown steadily since its founding—but now, I expect it to reach warp speed.
“This firm is by far the most experienced deepwater operator in Mozambique.
“In East Africa, in addition to the Rovuma Basin off Mozambique, the company holds significant interests in exploratory blocks off Kenya.
So why is this Mozambique find such a big deal? How much will the stock go up?
“After this company made a smaller deepwater discovery in the Gulf of Mexico in 2009, the stock jumped 124% in just five months. When it starts to monetize this much bigger find, 124% could look like small potatoes.
“From the research I’ve done, I think this stoc